The pain continued in the crypto market as the ongoing collapse of billionaire Sam Bankman-Fried’s FTX exchange rocked the industry – with no relief in sight. Bitcoin hits tow-year low below $16k FTX holds deposits for many of the biggest investors in the crypto industry.
This has resulted in some FTX customers being unable to withdraw from the exchanges they use to buy and sell various digital tokens. There is also concern that crypto market volatility will occur if FTX collapses.
The price of Bitcoin fell below $16,000 for the first time since November 2020 after Binance said it would not go through with the deal after doing due diligence on FTX. On Tuesday, Binance signed off on its intention to buy rival FTX in a letter.
But just a little over 24 hours later, that plan fell apart. That has left the famous digital company’s future uncertain as it faces up to $8 billion in debt, according to people familiar with the matter.
However, it sent bitcoin down further, falling to $16,000 shortly after the announcement. It’s reported in a statement to The Wall Street Journal that Binance stepped down after reviewing the company’s books and structure. Binance tweeted on Wednesday:
“Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”
The fear among crypto traders is that a crisis at FTX or Bankman-Fried trading firm Alameda Research could lead to forced selling; it affects not only the exchange rate of FTX’s own exchange token FTT, but other cryptocurrencies from bitcoin to ETH and Solana’s SOL.
Bob Iaccino, Path Trading Partners co-founder, said:
This is another one of those catalysts.” He added, “I wouldn’t be surprised if bitcoin went as low as $9,000, which for me, as someone who got out of bitcoin and is waiting to get in again, would actually be a positive.
Iaccino also stated that:
I still believe crypto is here to stay but these things need to clean out before you can do serious investments in the space, especially from a traditional finance perspective.
BTC spent most of October at the $19,000 price point but recovered to $20,000 later this month. It held steady until the FTX-Binance drama began to unfold, ultimately sending crypto investors into a frantic bank run. The BTC price is now 75% below its all-time high of $69,044, which it touched in November 2021.
All other coins and tokens are also in trouble. Ethereum, the second-largest cryptocurrency by market capitalization, fared worse than bitcoin, falling 16% in 24 hours to just under $1,100.
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